Figure 10-2

-Refer to Figure 10-2.Suppose that the production of soccer balls creates a social cost which is depicted in the graph above.Without any government regulation,what price will the firm charge per soccer ball?
A)$3
B)$5.50
C)$7.50
D)$10

Question

Figure 10-2
 
-Refer to Figure 10-2.Suppose that the production of soccer balls creates a social cost which is depicted in the graph above.Without any government regulation,what price will the firm charge per soccer ball?
A)$3 
B)$5.50 
C)$7.50 
D)$10

Quizplus · Accepted Answer

Without government regulation, the firm will charge the price where the private cost (supply curve) intersects the demand curve, which is typically the market equilibrium price. In this scenario, it is $7.50.

Figure 10-2 -Refer to Figure 10-2.Suppose That the Production of Soccer Balls